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Governance and Economic Development in Africa

By:L.A. Darga

Addis Ababa 1997

A pressing call is being made for democracy in Africa as a consequence of both internal and external pressures. The sources and conditions under which the external pressures are being expressed are well known. It is undeniable that there have been and there are internal pressures, exerted mainly by forces which are predominantly urban based while different configuration or classes and socio-professional groups in different contexts, and that the forces that played more determining role in the struggle for independence, namely the organized working class, in terms of trade unions, and the peasantry are notably absent or less prominent. What interpretation can one give of such reality and what consequences can one draw in terms of forces for driving and sustaining a new phase of democratization and governance?

Confusing Debate about Governance and Democracy

The concepts of governance and democracy are interrelated, but not the same. The debate around the two issues has however remained a confused one, largely reflecting the diversity of agenda of the diverse internal and external forces. The question is then whether the agenda for democratization is political or economic. If all seem to agree that these two cannot be divorced, not all are of the view that the political is the precondition for the economic. The concept of governance has been diversely defined among different observers and actors concerned. While organized civil society, academics, NGOs and the media of the developed countries have given more prominence to the moral and humanitarian imperatives, and call for political pluralism, popular participation, competitive elections, and free flow of information, economic imperatives are driving internal forces to call for the same principles. The World Bank defines governance as the manner in which power is exercised in the management of a countrys economic and social resources for development. This definition is far from being inclusive of democracy as a precondition. The Development Advisory Committee of the OECD (Organization for Economic Cooperation and Development) explicitly sets democratization, improved governance and human rights as their policy definition approach to political reform for the African states. For the external forces, there is the realization that after decades of funding, many African countries, are failing to show a level of economic development capable of offering a growing market in the context of globalization, or even the conditions for dependent accumulation. One may question whether there would have been any agenda for democratization if the state and governments had, as has been the case in Chile, been an autocratic and repressive one, but capable of offering the necessary conditions for accumulation. Internally, social forces, organized civil society, and the overwhelming majority of the people converge on their despair at the fact that leaders have failed to deliver on promises of economic betterment. They also converge in the realization that changes of regimes have not brought about meaningful changes in their economic conditions. This has brought to the fore 2

the evidence that the current crisis is a crisis of the state, and the incapacity of such state in engineering growth and development. I recognize that there are divergent schools of thought in the debate regarding the role of the state in economic development, specially in a series of historical settings and indeed across several regions. With reference to the East Asian development performance, however, the earlier late industrialization of Japan is the story of the political creation of a market system. The core of state action being in terms of policy administrative guidance, it also takes administrative measures for rent creation such as - privileged finance, infrastructure investment, fiscal incentive, and a dynamic system of protection and promotion. For instance, both in Korea and Taiwan the state played an active role in providing support, and in determining the composition and allocating of the private sector investment. In each case, the government steered the direction of economic development, and engineered the emergence or strengthening of the indigenous entrepreneurial class. Most importantly, these governments were successful in building up growth coalitions which were brought about through the interaction of governments, producing public and private sectors and that created the necessary political, economic and institutional environment in which growth could occur. What is the African civil service in such a perspective? As the space for vibrant economic activities and private accumulation opportunities shrinks, the civil service has become

the only provider of a secure job (even when it does not always mean a secure income or a decent income) and a position of power from which rent can be extracted in various forms. Where economic activities are private and vibrant, it is essentially from economic operators, to a certain, often to a lesser, extent from civilians. Where economic activities have come to a virtual non existence, the civil service becomes more and more predatory on the masses. However, even when this meager source of rent extraction dries up as the masses becomes more impoverished, they turn to the informal sector economic activities.

Many sub-Saharan Africa countries therefore present a situation where the state is weak, often in deliquescence, and is unable to assume the leadership of a coalition of forces, is in permanent conflict with civil society. Far from strengthening the capacity of the state to assume any role in development, Structural Adjustment Programmes which have imposed reduction in state expenditure, which led to retrenchment, have terribly undermined it. In the debate about conditions for economic growth and development, protagonists have gradually been forced to converge on the acceptance that it is not the minimalist state in quantitative terms, but a competent, meritocractic bureaucracy that could make the difference in favor of formulating and implementing effective economic policies. The question of governance therefore can only be articulated today in the context of a strategy of expanding the national cake. This is the only agenda capable of building up national consensus, for in many countries the point of destitution is such that even those who hold state power have less and less to predate on, except for a handful few. Such an agenda could help to bring about a commonality of interests between the internal and external forces despite the fact that they have different strategies. That of the external forces is one articulated on the

primacy of macroeconomic reforms, and the expectation of foreign investment, in spite of trends in such investments giving little indications of interest for Africa, even where a large part of the conditions for their attraction has been met. That of the internal forces, while necessarily having to imply macroeconomic reforms, need to focus on creating conducive conditions to develop productive capacities and increase the basis for their further development. While such strategy requires a democratization process, in terms of participatory commitment, consultation, answerability, rule of law for security of economic assets tenure, freedom of expression, more inclusiveness, etc., it is questionable whether the full scale western model of democracy would be introduced and sustained in the earlier phase when such restructuring will necessarily engender resistance and destabilization from those sections of the previous order who now find themselves in the back seat. In conclusion, the views expressed in this presentation are that: 1. good governance cannot be an agenda by itself, but a means to an end; 2. in the context of the economic crisis and shrinking wealth production the civil service as a major apparatus of the state is bound to be the center of conflict partly because of its conflictual relationship with civil society. 3. the agenda for governance can only be driven by a consensus of the social forces which have direct and immediate interests in promoting opportunities for accumulation, and in this process the state should be seen as an essential element of this agenda; 4. the strategy of external forces which fails to address the fundamental issue of reform of the productive base, and which views civil service reform in quantitative terms would contradict the pursuit of good governance. These external forces should contribute towards the urgent development of a professional, efficient, stable and secure civil service, whose mere weight in terms of the share of GDP should be managed in a phased manner relative to the growing national accumulation. 5. no argument is being made here to the effect that exigencies of development have to take precedence over the necessity of democracy. Democracy is not conceived as a moral imperative, but as a political process, and as such its form and content must be in dialectical relationship with the development, in a mutually sustainable process, providing the institutional capacity to, on the one hand, managing conflicts in a nondisruptive manner, on the other, and thus striking right balance to the twin problems associated with the allocation of pains and gains of the development process.